The National Bank of Poland’s monetary panel initiated an easing cycle last week with a reduction of the benchmark rate by 0.25 percentage points to 4.5%. The Polish central bank began its easing cycle amid flagging economic growth, with the Polish government limiting the growth of public spending, domestic consumption slowing, and stagnation in the neighboring euro zone taking its toll.

Polish rate setters were previously in a strongly hawkish mode, which involved raising borrowing costs in May, the fifth increase of the tightening cycle that began in Jan. 2011.

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But Poland’s slowing economy is doing less now to stoke inflation. The Polish economy is expected to have grown less than 2% on the year in the third quarter, said Anna Zielinska-Glebocka, a member of Poland’s 10-strong monetary panel. The reading due Nov. 30 will likely show further slowdown from growth at 2.3% on the year in the second and 3.6% in the first, she said.

Data published Wednesday showed the annual rate of consumer price inflation slowed to 3.4% in October from 3.8% in September. It was the first time CPI was within the central bank’s tolerance range of 1.5%-3.5% since Dec. 2010.

Mrs. Zielinska-Glebocka said borrowing costs should go down rapidly, with the benchmark rate going down to 3.8% or even below.

“I’m in favor of lowering interest rates over a short period of time by 100 basis points,” said Anna Zielinska-Glebocka on business news broadcaster TVN CNBC. “Whether it gets done over one, two or three monthly meetings, we’ll see, it’s a collegial decision.”

“I wouldn’t put it off to further quarters of the year because effects of our action are visible only after a few quarters and we should take action now, as soon as possible,” she said.

Economists have said the latest figures indicate Polish interest rates would likely go down again in early December.

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